S&P raises Shimao Group

S&P said it upgraded Shimao Group Holdings Ltd.’s issuer rating to BBB- from BB+ and its senior unsecured notes to BB+ from BB.

“Shimao has high visibility on its future revenue and contracted sales. We forecast that the company will achieve 15%-20% revenue growth overall in 2021, and low-double-digit revenue growth in its property development segment in 2022-2023, compared with 20% in 2020. This should be achievable with the unrecognized revenue from property sales, which we estimate at about Chinese renminbi (RMB) 180 billion at end-2020,” S&P said in a press release.

In the nonproperty development sector, the agency said it forecasts revenue from property management, commercial property and hotel businesses will reach 10%-15% of total revenue in 2022, up from around 5% in 2020.

The outlook is stable.

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